Wall Street’s main indexes experienced gains on Wednesday, driven by the surge in Nvidia shares. Investors are hopeful for another strong outlook from the chip designer, which could reignite a rally in megacap growth stocks powered by artificial intelligence. The anticipation of Nvidia surpassing revenue targets has pushed the company’s Stock to a record high. However, there are concerns that a wider selloff may occur if the company fails to meet investor expectations. Nvidia is expected to report its quarterly results after the market closes on Wednesday.
The blowout forecast provided by Nvidia last quarter has been a significant factor in the S&P 500’s 15% gain this year. Investors have high expectations for the company’s future performance based on the guidance and commentary provided. Shares of other major growth stocks, such as Alphabet, Meta Platforms, and Netflix, have also rebounded after declining earlier in August. The strength of the U.S. economy and concerns about higher interest rates had initially caused these stocks to decline. However, data showing elevated signups for Netflix in the United States has boosted investor confidence. As a result, the S&P 500 communication services index has risen by 2.3%.
Equities received an additional boost as the yield on the 10-year U.S. Treasury note pulled back from near 16-year highs. Weak business activity data from the United States and the euro zone suggested global disinflation, leading to a decrease in the yield. Investors are eagerly awaiting comments from U.S. Federal Reserve Chair Jerome Powell on Friday for more insights into the central bank’s interest rate path. Currently, traders are betting on a pause in rate hikes by the Fed next month, with a probability of 88.5% according to CME Group’s FedWatch tool.
According to a RushHourDaily poll, strategists predict that U.S. stocks will only experience marginal gains until the end of the year. The S&P 500 is forecasted to reach 4,496, representing a 2.2% increase from Monday’s close. As of 11:38 a.m. ET, the Dow Jones Industrial Average was up 0.39%, the S&P 500 was up 0.88%, and the Nasdaq Composite was up 1.48%.
In contrast, sport retailers Nike and Under Armour saw declines in their stock prices after Foot Locker provided a downbeat profit forecast. Foot Locker’s shares plummeted by 32.9%, impacting the performance of these retailers. On the other hand, drugmakers Gilead Sciences and Merck & Co experienced gains after Swiss rival Roche inadvertently published positive lung cancer drug trial data.
Peloton Interactive faced a significant drop in its stock price, reaching a record low, after the company pushed back its cash-flow positive target. This news led to a 22.5% plunge in Peloton shares. Overall, advancing issues outnumbered decliners on both the NYSE and the Nasdaq.
The S&P index recorded 7 new 52-week highs and 10 new lows, while the Nasdaq recorded 35 new highs and 115 new lows. This information was reported by Amruta Khandekar and Shristi Achar A, with editing by Shinjini Ganguli and Anil D’Silva. The article adheres to the Thomson RushHourDaily Trust Principles. Shristi Achar A is a correspondent on the markets team, reporting on stock markets across the U.S., UK, Canada, Europe, and emerging markets.
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